India’s public spending on education at about 4% of GDP is lower than that of most middle-income and low-income countries. However, when it comes to using these funds effectively, India may be a relative outperformer in the developing world, a new World Bank study by Élisé Wendlassida Miningou shows.
Miningou uses data from 130 countries between 2000-2015 to gauge efficiency in public education spending. Efficiency is measured by comparing public expenditure per child against improvements in access to education and learning in these countries. Access to education is measured in terms of the ‘learning‐adjusted years of schooling’ which is the number of years of quality schooling a child can expect to obtain by age 18. Learning is measured using harmonized test scores.
Based on the analysis, an overall efficiency score of 87% was calculated for all 130 countries. This means that around 13% of education spending had no effect on access to education and learning. Richer countries, though, were more efficient with an average efficiency score of 97%. On the other hand, developing countries (low-and middle‐income countries) were less efficient (84%). India’s efficiency score of 91% was higher than the average across developing countries as well as the global average, the analysis shows.
The study suggests that efficiency in the use of public funds for education is positively linked to governance-related factors and labour market conditions. For instance, better institutional capacity and greater social inclusion policies are associated with greater efficiency. Similarly, low unemployment rates also seem to be associated with more efficient spending suggesting that demand for labour could incentivize more efficiency in public education.